The impact of Trump’s sweeping, and constantly changing, tariffs on Chinese-made imports into the US has begun to take hold of the fashion industry. On May 2, 2025, the de minimis threshold for goods shipping into the US under $800 was closed. Now, all shipments at any value containing goods produced in China or Hong Kong will be subject to US import tariffs based on their declared value, which could continue to fluctuate anywhere between 35%-145%, and must be fully declared in line with entry and payment procedures.
As a brand or retailer outside the US, this means that if any of your products have been manufactured in China and purchased by a customer in the US, even if it’s shipped from your country of origin, that customer will be subject to the current tariffs on your product, and additionally, for items at or under $800, there could be an $100 flat rate per shipment.
If you’re a brand or retailer based in the US that sells into international markets, prepare to face China’s likely retaliatory tariffs, which may have similar impacts, including causing your global customer bases to reconsider ordering from the US.
The new tariffs have very real implications for nearly every fashion retailer that ships to customers globally, from fast fashion to luxury houses. With profit margins already on thin ice, even a 10% tariff can cut into margins by three or four percentage points, while a 25% tariff is enough to erase profitable margins altogether. The brands that begin to adapt and rethink pricing, product, and supply chain strategies have the best chance of withstanding the headwinds.
Discover Style Arcade’s strategies and scenarios for how e-commerce and merchandising teams can offset the price impacts of tariffs, by considering the pros and cons of:
- passing the costs on to customers;
- absorbing the costs into your margins;
- increasing your product prices;
- and aligning paid advertising with product margins
Read more: 5 ways to reduce tariff impacts
How to calculate tariff impact
Now, for the math. It’s complicated, with a vast amount of variables to consider, however, the following steps can assist fashion brands and retailers outside the US to calculate the true impact of US tariffs on their products.
1. Classify your products
Determine each product’s Harmonized System (HS) code to know the customs duty rate a product will face when entering the US. The code will need to be declared on commercial invoices, customs declarations, and shipping and logistics documents. An incorrect code can result in overpaying or underpaying duties, which may have consequences.
2. Know your tariff rates
Use the HS codes to look up applicable tariff rates for your SKUs using the US Harmonized Tariff Schedule (HTSUS): https://hts.usitc.gov. Search by HS code or product description to find the “General” rate of duty, which applies to most countries, unless there are agreements in place.
3. Calculate the landing cost
The landing cost is the sum of:
- Unit cost of the product: The price you paid for the product from the manufacturer or supplier.
- Exchange rate: The current exchange rate between the original currency and your local currency.
- Shipping/freight: transporting the product from the supplier to your location.
- Import duties: Tariffs and other customs fees.
- Risk: Insurance costs to protect against loss or damage during transit.
- Overhead: Handling, warehousing, and other logistical activities.
4. Model tariff impacts across products and supplies
Scenario modeling using tariff rates will help retailers to forecast which products and suppliers carry the highest potential cost impacts. Consider shifting suppliers or countries of origin.
5. Include the costs of returns and warehousing logistics
Just as your products become more expensive to import, products returned to your country of origin, or aged stock housed in local 3PLs or warehousing networks, will incur greater costs as well. Consider the impacts of lost margin on returned items, additional warehousing and handling costs, and potentially written-off stock.
The Margin Calculator
To support Style Arcade’s community of fashion brands and retailers, the Margin Calculator is here to turn hours of tariff calculations into seconds. Understand the cost of every decision, with real-time costing logic to instantly quantify how tariffs, currency, and supply shifts will affect your profit margin.
- Add freight, duty, currency, and supplier costs directly into your Range Plan—not scattered across spreadsheets.
- Adjust volume, RRP, or source country to instantly see the impact on margin across your entire assortment.
- Trade-offs become clear so you can make smarter calls on pricing, margin, and distribution to protect profit.
Key features
- Accurate landing cost: Every cost that hits margin from freight to foreign exchange.
- Multi-currency built in: Use stored exchange rates to automate local & global pricing.
- Automated pricing rules: Set RRPs or cost rules by supplier, category, or channel.
- Margin by region or channel: Adjust strategy based on profit changes by market.
Ready to start making margin-first decisions with Margin Calculator?
Main image credit: Wikipedia
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